Download Zipped Introduced WordPerfect SB0207.ZIP
[Status][Bill Documents][Fiscal Note][Bills Directory]

S.B. 207

             1     

MOTOR VEHICLE INSURANCE COVERAGE

             2     
AMENDMENTS

             3     
2005 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Dan R. Eastman

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Insurance Code by amending provisions related to motor vehicle
             10      liability coverage.
             11      Highlighted Provisions:
             12          This bill:
             13          .    provides that if a claim is brought by the named insured or other covered persons,
             14      the coverage may not be stepped-down because:
             15              .    a permissive user driving a covered motor vehicle is at fault in causing an
             16      accident; or
             17              .    the named insured or other certain persons driving a covered motor vehicle are
             18      at fault in causing an accident; and
             19          .    makes technical changes.
             20      Monies Appropriated in this Bill:
             21          None
             22      Other Special Clauses:
             23          None
             24      Utah Code Sections Affected:
             25      AMENDS:
             26          31A-22-303, as last amended by Chapters 90 and 126, Laws of Utah 2004
             27     



             28      Be it enacted by the Legislature of the state of Utah:
             29          Section 1. Section 31A-22-303 is amended to read:
             30           31A-22-303. Motor vehicle liability coverage.
             31          (1) (a) In addition to complying with the requirements of Chapter 21, Insurance
             32      Contracts in General, and Chapter 22, Part 2, Liability Insurance in General, a policy of motor
             33      vehicle liability coverage under Subsection 31A-22-302 (1)(a) shall:
             34          (i) name the motor vehicle owner or operator in whose name the policy was purchased,
             35      state that named insured's address, the coverage afforded, the premium charged, the policy
             36      period, and the limits of liability;
             37          (ii) (A) if it is an owner's policy, designate by appropriate reference all the motor
             38      vehicles on which coverage is granted, insure the person named in the policy, insure any other
             39      person using any named motor vehicle with the express or implied permission of the named
             40      insured, and, except as provided in Subsection (7), insure any person included in Subsection
             41      (1)(a)(iii) against loss from the liability imposed by law for damages arising out of the
             42      ownership, maintenance, or use of these motor vehicles within the United States and Canada,
             43      subject to limits exclusive of interest and costs, for each motor vehicle, in amounts not less
             44      than the minimum limits specified under Section 31A-22-304 ; or
             45          (B) if it is an operator's policy, insure the person named as insured against loss from
             46      the liability imposed upon him by law for damages arising out of the insured's use of any motor
             47      vehicle not owned by him, within the same territorial limits and with the same limits of liability
             48      as in an owner's policy under Subsection (1)(a)(ii)(A);
             49          (iii) except as provided in Subsection (7), insure persons related to the named insured
             50      by blood, marriage, adoption, or guardianship who are residents of the named insured's
             51      household, including those who usually make their home in the same household but
             52      temporarily live elsewhere, to the same extent as the named insured [and];
             53          (iv) where a claim is brought by the named insured or a person described in Subsection
             54      (1)(a)(iii), the available coverage of the policy may not be reduced [to the persons described in
             55      this Subsection (1)(a)(iii)] or stepped-down because:
             56          (A) a permissive user driving a covered motor vehicle is at fault in causing an accident;
             57      or
             58          (B) the named insured or any of the persons described in this Subsection (1)(a)(iii)


             59      driving a covered motor vehicle is at fault in causing an accident; and
             60          [(iv)] (v) cover damages or injury resulting from a covered driver of a motor vehicle
             61      who is stricken by an unforeseeable paralysis, seizure, or other unconscious condition and who
             62      is not reasonably aware that paralysis, seizure, or other unconscious condition is about to occur
             63      to the extent that a person of ordinary prudence would not attempt to continue driving.
             64          (b) The driver's liability under Subsection (1)(a)[(iv)] (v) is limited to the insurance
             65      coverage.
             66          (2) (a) A policy containing motor vehicle liability coverage under Subsection
             67      31A-22-302 (1)(a) may:
             68          (i) provide for the prorating of the insurance under that policy with other valid and
             69      collectible insurance;
             70          (ii) grant any lawful coverage in addition to the required motor vehicle liability
             71      coverage;
             72          (iii) if the policy is issued to a person other than a motor vehicle business, limit the
             73      coverage afforded to a motor vehicle business or its officers, agents, or employees to the
             74      minimum limits under Section 31A-22-304 , and to those instances when there is no other valid
             75      and collectible insurance with at least those limits, whether the other insurance is primary,
             76      excess, or contingent; and
             77          (iv) if issued to a motor vehicle business, restrict coverage afforded to anyone other
             78      than the motor vehicle business or its officers, agents, or employees to the minimum limits
             79      under Section 31A-22-304 , and to those instances when there is no other valid and collectible
             80      insurance with at least those limits, whether the other insurance is primary, excess, or
             81      contingent.
             82          (b) (i) The liability insurance coverage of a permissive user of a motor vehicle owned
             83      by a motor vehicle business shall be primary coverage.
             84          (ii) The liability insurance coverage of a motor vehicle business shall be secondary to
             85      the liability insurance coverage of a permissive user as specified under Subsection (2)(b)(i).
             86          (3) Motor vehicle liability coverage need not insure any liability:
             87          (a) under any workers' compensation law under Title 34A, Utah Labor Code;
             88          (b) resulting from bodily injury to or death of an employee of the named insured, other
             89      than a domestic employee, while engaged in the employment of the insured, or while engaged


             90      in the operation, maintenance, or repair of a designated vehicle; or
             91          (c) resulting from damage to property owned by, rented to, bailed to, or transported by
             92      the insured.
             93          (4) An insurance carrier providing motor vehicle liability coverage has the right to
             94      settle any claim covered by the policy, and if the settlement is made in good faith, the amount
             95      of the settlement is deductible from the limits of liability specified under Section 31A-22-304 .
             96          (5) A policy containing motor vehicle liability coverage imposes on the insurer the
             97      duty to defend, in good faith, any person insured under the policy against any claim or suit
             98      seeking damages which would be payable under the policy.
             99          (6) (a) If a policy containing motor vehicle liability coverage provides an insurer with
             100      the defense of lack of cooperation on the part of the insured, that defense is not effective
             101      against a third person making a claim against the insurer, unless there was collusion between
             102      the third person and the insured.
             103          (b) If the defense of lack of cooperation is not effective against the claimant, after
             104      payment, the insurer is subrogated to the injured person's claim against the insured to the extent
             105      of the payment and is entitled to reimbursement by the insured after the injured third person has
             106      been made whole with respect to the claim against the insured.
             107          (7) A policy of motor vehicle liability coverage under Subsection 31A-22-302 (1) may
             108      specifically exclude from coverage a person who is a resident of the named insured's
             109      household, including a person who usually makes his home in the same household but
             110      temporarily lives elsewhere, if:
             111          (a) at the time of the proposed exclusion, each person excluded from coverage satisfies
             112      the owner's or operator's security requirement of Section 41-12a-301 , independently of the
             113      named insured's proof of owner's or operator's security;
             114          (b) the named insured and the person excluded from coverage each provide written
             115      consent to the exclusion; and
             116          (c) the insurer includes the name of each person excluded from coverage in the
             117      evidence of insurance provided to an additional insured or loss payee.
             118          (8) A policy of motor vehicle liability coverage may limit coverage to the policy
             119      minimum limits under Section 31A-22-304 if the insured motor vehicle is operated by a person
             120      who has consumed any alcohol or any illegal drug or illegal substance if the policy or a


             121      specifically reduced premium was extended to the insured upon express written declaration
             122      executed by the insured that the insured motor vehicle would not be so operated.
             123          (9) (a) When a claim is brought exclusively by a named insured or a person described
             124      in Subsection (1)(a)(iii) and asserted exclusively against a named insured or an individual
             125      described in Subsection (1)(a)(iii), the claimant may elect to resolve the claim:
             126          (i) by submitting the claim to binding arbitration; or
             127          (ii) through litigation.
             128          (b) Once the claimant has elected to commence litigation under Subsection (9)(a)(ii),
             129      the claimant may not elect to resolve the claim through binding arbitration under this section
             130      without the written consent of both parties and the defendant's liability insurer.
             131          (c) (i) Unless otherwise agreed on in writing by the parties, a claim that is submitted to
             132      binding arbitration under Subsection (9)(a)(i) shall be resolved by a panel of three arbitrators.
             133          (ii) Unless otherwise agreed on in writing by the parties, each party shall select an
             134      arbitrator. The arbitrators selected by the parties shall select a third arbitrator.
             135          (d) Unless otherwise agreed on in writing by the parties, each party will pay the fees
             136      and costs of the arbitrator that party selects. Both parties shall share equally the fees and costs
             137      of the third arbitrator.
             138          (e) Except as otherwise provided in this section, an arbitration procedure conducted
             139      under this section shall be governed by Title 78, Chapter 31a, Utah Uniform Arbitration Act,
             140      unless otherwise agreed on in writing by the parties.
             141          (f) (i) Discovery shall be conducted in accordance with Rules 26b through 36, Utah
             142      Rules of Civil Procedure.
             143          (ii) All issues of discovery shall be resolved by the arbitration panel.
             144          (g) A written decision of two of the three arbitrators shall constitute a final decision of
             145      the arbitration panel.
             146          (h) Prior to the rendering of the arbitration award:
             147          (i) the existence of a liability insurance policy may be disclosed to the arbitration
             148      panel; and
             149          (ii) the amount of all applicable liability insurance policy limits may not be disclosed to
             150      the arbitration panel.
             151          (i) The amount of the arbitration award may not exceed the liability limits of all the


             152      defendant's applicable liability insurance policies, including applicable liability umbrella
             153      policies. If the initial arbitration award exceeds the liability limits of all applicable liability
             154      insurance policies, the arbitration award shall be reduced to an amount equal to the liability
             155      limits of all applicable liability insurance policies.
             156          (j) The arbitration award is the final resolution of all claims between the parties unless
             157      the award was procured by corruption, fraud, or other undue means.
             158          (k) If the arbitration panel finds that the action was not brought, pursued, or defended
             159      in good faith, the arbitration panel may award reasonable fees and costs against the party that
             160      failed to bring, pursue, or defend the claim in good faith.
             161          (l) Nothing in this section is intended to limit any claim under any other portion of an
             162      applicable insurance policy.
             163          (10) An at-fault driver or an insurer issuing a policy of insurance under this part that is
             164      covering an at-fault driver may not reduce compensation to an injured party based on the
             165      injured party not being covered by a policy of insurance that provides personal injury
             166      protection coverage under Sections 31A-22-306 through 31A-22-309 .




Legislative Review Note
    as of 2-3-05 1:04 PM


Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel


[Bill Documents][Bills Directory]